Blog-Reference
You say: “One underlying question is if economics is to be a science — what kind of ‘science’ can it be?” False, economics has only the choice between complying with well-defined standards or being thrown out of science. Science was there before economics was there and the Greeks defined it as episteme = knowledge in contradistinction to doxa = opinion. This demarcation line is often hard to draw in the concrete case but it nevertheless exists.
The guiding principle for establishing knowledge is the distinction between true/false: “There are always many different opinions and conventions concerning any one problem or subject-matter (such as the gods). This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper, 1994, pp. 39-40)
This is the meaning of SCIENTIFIC truth (= formal and material consistency) which is different from religious or philosophical truth. A heterodox economist who says that ‘there is no truth’ shoots himself in the foot because if anything goes and nothing matters Orthodoxy cannot be criticized/falsified/rejected. To deny the true/false criterion means to kick oneself out of science. Asad Zaman is a prominent example.
Another widespread error of Heterodoxy is to maintain that rejection/debunking of Orthodoxy is sufficient. It is not: “The problem is not just to say that something might be wrong, but to replace it by something — and that is not so easy.” (Feynman, 1992, p. 161)
Replacement means in concrete terms to replace the methodologically unacceptable microfoundations, which are nothing but the explicit formal specification of methodological individualism, with correct macrofoundations. This means in even more concrete terms that one needs a total replacement for this axiomatic hardcore: “HC1 economic agents have preferences over outcomes; HC2 agents individually optimize subject to constraints; HC3 agent choice is manifest in interrelated markets; HC4 agents have full relevant knowledge; HC5 observable outcomes are coordinated, and must be discussed with reference to equilibrium states.” (Weintraub, 1985, p. 147)
The green cheese behavioral assumptions HC1, HC2, HC4 define economics as a social science. The crux of the so-called social sciences, though, is this: “By having a vague theory it is possible to get either result. ... It is usually said when this is pointed out, ‘When you are dealing with psychological matters things can’t be defined so precisely’. Yes, but then you cannot claim to know anything about it.” (Feynman, 1992, p. 159). Because of this, behavioral assumptions cannot be taken into the axiomatic foundations of a theory. Remember Aristotle: “When the premises are certain, true, and primary, and the conclusion formally follows from them, this is demonstration, and produces scientific knowledge of a thing.”
As a matter of principle, behavioral assumptions/propositions are NOT certain enough and therefore they cannot be used as the axiomatic foundation of economics. This is the fatal methodological blunder of Orthodoxy. Economics has to be redefined as systems science and put on objective (= non-behavioral) foundations.#1
The mistake of Heterodoxy is to define itself in opposition to Orthodoxy. This negative identity has to be turned into a positive identity by spelling out the foundational propositions that define Heterodoxy. The fault of Orthodoxy has never been to apply the axiomatic-deductive method but to choose shaky behavioral assumptions as axioms. The fault of heterodox economics is that it cannot define itself with a handful of objective and certain foundational propositions. What is built upon shaky foundations eventually falls apart. This is what happened to Orthodoxy and this is why Heterodoxy never got off the ground.
Does the world expect economists to find out how people behave? No, this is the proper job of psychology, sociology, anthropology, history, political science, evolution theory, criminology, etcetera. Does the world expect economists to figure out what profit is? Yes, of course, no philosopher, psychologist, biologist, or sociologist will ever try to figure this out.
Have orthodox or heterodox economists figured out what profit is? No: “A satisfactory theory of profits is still elusive.” (Desai, 2008, p. 10). So, economists can be defined as scientific write-offs who give economic policy advice without ever having understood the pivotal concept of their subject matter.#2 If there ever was a scientific failure worse than the flat earth theory then it is economics defined as a social science. And exactly this is what Orthodoxy and Heterodoxy have in common.
Egmont Kakarot-Handtke
References
Desai, M. (2008). Profit and Profit Theory. In S. N. Durlauf, and L. E. Blume (Eds.), The New Palgrave Dictionary of Economics Online, 1–11. Palgrave Macmillan, 2nd edition. URL
Feynman, R. P. (1992). The Character of Physical Law. London: Penguin.
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York, NY: Routledge.
Weintraub, E. R. (1985). Joan Robinson’s Critique of Equilibrium: An Appraisal. American Economic Review, Papers and Proceedings, 75(2): 146–149. URL
#1 Economics is NOT a science of behavior
#2 How the intelligent non-economist can refute every economist hands down
For details of the big picture see cross-references Heterodoxy.
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REPLY to Jamie Morgan on Jun 4My main points in a nutshell:
(i) Methodology is important — but only if it helps to promote the real thing.
(ii) The real thing is to answer the question of how the actual (world-) economy works.
(iii) So, compared to physics the subject matter is the universe and not the learning-disabled fruit-fly called homo oeconomicus.
(iv) Because of this, economics has to get out of folk psychology, folk sociology, folk history, and folk politics. Economics is a systems science.
(v) One cannot perceive the economy with the two natural eyes but only with the third eye of theory. So economics is abstract and not accessible by way of storytelling and misplaced concreteness.
(vi) Theory is composed of elementary premises (= axioms) and the superstructure of derived propositions. A theory is true if it satisfies the criteria of formal and material consistency. The true theory is the precondition of any policy advice. Policy advice without true theory is an abuse of science for agenda-pushing. This is what economics is today. Both Orthodoxy and Heterodoxy are stuck at the proto-scientific level.
(vii) Orthodoxy is microfounded (see the axioms HC1 to HC5 in the post above). This is the methodological root error/mistake.
(viii) The task of Heterodoxy is to replace microfoundations with macrofoundations.
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REPLY to Ken Zimmerman on Jun 5You say: “if you mean by ‘real thing’ the historical processes through which economic theories, actions, and ways of life are constructed, then we’re on the same page.”
The real thing is theoretical economics, that is, the formally and materially correct explanation of how the (actual-monetary-world) economy works. The true theory is the precondition for the understanding of present and past economic reality.
It is not only that Orthodoxy has failed but Heterodoxy, too. The representative economist — including historians since the German Historical School and the American Institutionalists since Veblen — has until this day NO idea of what profit is. This is comparable to a medieval physicist who has no proper understanding of the fundamental concept of energy. The contribution of historians to economic theory has been zero.
So, we are certainly NOT on the same page. As I see it there is no chance that you will ever get out from behind the curve. For details see The future of economics: why you will probably not be admitted to it, and why this is a good thing.
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REPLY to Jamie Morgan on Jun 9Imagine somebody throwing three golf balls amidst a cyclone over their shoulder into a very large sandbox. Clearly, the three balls form a triangle but no one can predict its form and size. Yet, the mathematician can tell with certainty that the sum of angles is 180 degrees (if the sandbox is Euclidean).
Science is about invariants, that is, properties or relationships which remain unchanged over time. A famous example is E=mc2 which describes not a single historical event but something that is the case always and everywhere. Non-scientists and historians are glued to the ever-changing surface, so they produce stories while scientists produce laws.
Here, for example, is the First Economic Law on Wikimedia AXEC06:
which shows the relationship between the firm, the market, and the income distribution for the pure consumption economy.
Needless to say that all variables are measurable, hence, the First Economic Law is a testable proposition. This is the way how economics gets out of the proto-scientific stage. Or, as Popper put it: “It is the optimistic theory that science, that is real knowledge about the hidden real world, though certainly very difficult, is nevertheless attainable, at least for some of us.”
At the moment neither orthodox nor heterodox economists are among the “some of us”.
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REPLY to Asad Zaman on Jun 9The pure consumption economy is, of course, the most elementary case. The problem is that BOTH orthodox AND heterodox economists do not even understand the simple things. Because of this, they have NO chance to understand anything: “There can be no doubt whatsoever that a problem which has not yet been solved in all its aspects under its simplest conditions will be still more difficult to tackle if other, ‘more realistic’ assumptions are being made.” (Morgenstern, 1941, p. 373)
From the elementary production-consumption economy follows by successive differentiation the complete Employment Law which contains profit/loss, profit distribution, saving/dissaving, investment/disinvestment (2012), public deficit spending, and import/export.
This equation then describes the actual monetary economy exhaustively and — that is decisive — it is testable. So, everybody who thinks that the axiomatically founded structural Employment Law is false can try to refute it. This is how matters are settled since the ancient Greeks invented the scientific method.
If you have a better methodology it would be appropriate to present a testable proposition about how the actual economy works. At the end of the day methodological discussions must result in an improved understanding of the economy or else they are vacuous. In particular, it would be interesting to learn something about Zaman’s Profit Law. After all, profit is the pivotal phenomenon of the capitalist economy. Who does not understand profit understands nothing (2014).
References
Kakarot-Handtke, E. (2012). Keynes’ Employment Function and the Gratuitous Phillips Curve Disaster. SSRN Working Paper Series, 2130421: 1–19. URL
Kakarot-Handtke, E. (2014). The Profit Theory is False Since Adam Smith. What About the True Distribution Theory? SSRN Working Paper Series, 2511741:
1–23. URL
Morgenstern, O. (1941). Professor Hicks on Value and Capital. Journal of Political Economy, 49(3): 361–393. URL
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REPLY to Jamie Morgan on Jun 10(i) You write: “... and to be clear Euclid is not science it is maths-geometry.” This is not the only methodological point where you are way behind the curve. Note that science is ultimately the perfect SYNTHESIS of logic and experience: “Hilbert and Einstein again agree that geometry is a natural science based on real experiments and measurements. Thus, similarly to Einstein, Hilbert can assert: Geometry is nothing but a branch of physics; in no way whatsoever do geometrical truths differ essentially from physical truths nor are they of a different nature.” (Majer, 1995, p. 280)
(ii) You ask: “How would you respond to Axiom 1: people sometimes follow rules; Axiom 2: rules change.” My answer: there is NO such thing as a behavioral axiom.#1 To accept behavioral assumptions as axioms is the cardinal methodological error/mistake of Orthodoxy and Heterodoxy.#2
(iii) The scientific method is well-defined: “Research is, in fact, a continuous discussion of the consistency of theories: formal consistency insofar as the discussion relates to the logical cohesion of what is asserted in joint theories; material consistency insofar as the agreement of observations with theories is concerned.” (Klant, 1994, p. 31)
Logical consistency is secured by applying the axiomatic-deductive method and empirical consistency is secured by applying state-of-the-art testing. Isn’t it curious that genuine scientists have no problem at all with this methodology since the ancient Greeks but that so-called social scientists cannot get their heads around it?
(iv) A good rule for your methodological thoughts is: Whenever you meet with approval from Asad Zaman, Ken Zimmerman, Robert Locke, or other would-be scientists you can be sure that you have lost your way.
References
Klant, J. J. (1994). The Nature of Economic Thought. Aldershot, Brookfield: Edward Elgar.
Majer, U. (1995). Geometry, Intuition and Experience: From Kant to Husserl. Erkenntnis, 42(2): 261–285. URL
#1 Austrian blather
#2 Economics is NOT a science of behavior
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(i) Science does not explain everything, but non-science explains nothing. Scientific explanation comes in the communicative format of theory. Non-science comes in the format of storytelling.
(ii) Science is well-defined by material and formal consistency. These criteria are demanding and it is often not clear in the concrete case how to apply them. So the need for specification arises. This is where methodology comes in.
(iii) Nobody is forced to do science. But if one decides to do science one has to stick to the rules. As in all walks of life, some people either do not understand the rules or misapply them. Here again, methodology can be helpful. The proper role of methodology is NOT to soften scientific standards but to enforce them.#1
(iv) Economics is a science as clearly communicated in the title “Bank of Sweden Prize in Economic Sciences in Memory of Alfred Nobel”.
(v) Orthodox economics, though, does NOT satisfy scientific standards. More specifically: Walrasianism, Keynesianism, Marxianism, Austrianism is PROVABLY false.
(vi) Economics does not live up to the claim as stated in (iv). And this is the exact point where Heterodoxy comes it. Either Heterodoxy fully replaces Orthodoxy or both are eventually thrown out of science. There cannot be a pluralism of false theories.
(vii) To replace a theory means in very practical terms to replace the foundational hardcore, a.k.a. axioms, that is the Walrasian propositions HC1 to HC5 as enumerated above.
(viii) Due to form, at this critical juncture Ken Zimmerman again asks a silly question from behind the curve: “Egmont, ever ask yourself how and why were the axioms made? From God? From some great human law givers? From the universe?” And this brings us directly back to the key issue of this thread, viz. to Asad Zaman’s cognitive dissonance with the ancient Greeks.
“To Plato’s question, ‘Granted that there are means of reasoning from premises to conclusions, who has the privilege of choosing the premises?’ the correct answer, I presume, is that anyone has this privilege who wishes to exercise it, but that everyone else has the privilege of deciding for himself what significance to attach to the conclusions, and that somewhere there lies the responsibility, through the choice of the appropriate premises, to see to it that judgment, information, and perhaps even faith, hope and charity, wield their due influence on the nature of economic thought.” (Viner, 1963, p.12)
(ix) So, nobody hinders Jamie Morgan, Asad Zaman, Ken Zimmerman, and the rest of Heterodoxy to employ ‘the privilege of choosing the premises’. All there is to do is to take care that “the premises are certain, true, and primary” (Aristotle). Heterodoxy defines itself by its axioms or it is scientifically non-existent.
References
Viner, J. (1963). The Economist in History. American Economic Review, 53(2): 1–22. URL
#1 The insignificance of Gödel’s theorem for economics.
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REPLY to Asad Zaman on Jun 14Yes, I can, see Wikipedia (picture at the right-hand side)
“But it was a second and more important quality that struck readers of the Principia. At the head of Book I stand the famous Axioms, or the Laws of motion: … For readers of that day, it was this deductive, mathematical aspect that was the great achievement.” (Truesdell, quoted in Schmiechen, 2009, p. 213)
In Newton's own words: “Could all the phaenomena of nature be deduced from only thre [sic] or four general suppositions there might be great reason to allow those suppositions to be true.” (Westfall, 2008, p. 642)
References
Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, volume 1. Norderstedt: Books on Demand, 2nd edition. URL
Westfall, R. S. (2008). Never at Rest. A Biography of Isaac Newton. Cambridge: Cambridge University Press, 17th edition.
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REPLY to blockethe on Jun 14I appreciate your work on management. But this is an entirely different matter. Your example shows that you do not understand what the subject matter of economics is. Strictly speaking, management is the subject matter of psychology/sociology and NOT of economics. The subject matter of economics is the (world-) economy as a whole.
Imagine a physicist is asked to figure out how the universe works and after some time he comes back and says: “The universe is much too large, not of direct relevance to our daily lives, and ultimately incomprehensible, so I have analyzed the molehills in my front garden — with surprising results.”
One can say without contradiction that this physicist has done valuable empirical work but failed at the original task.
The error/mistake of the microfoundations approach is to take green cheese behavioral assumptions as axioms. And this, indeed, is what Poincaré has told Walras in no uncertain terms: “Walras approached Poincaré for his approval. ... But Poincaré was devoutly committed to applied mathematics and did not fail to notice that utility is a nonmeasurable magnitude. ... He also wondered about the premises of Walras’s mathematics: It might be reasonable, as a first approximation, to regard men as completely self-interested, but the assumption of perfect foreknowledge ‘perhaps requires a certain reserve’.” (Porter, 1994, p. 154)
No genuine scientist ever accepted or will ever accept the Walrasian axioms. Walrasians are de facto out of science since Walras.
Most economists have not realized that economics is NOT a science of human nature/behavior/action — not of individual behavior, not of social behavior, not of rational behavior, not of irrational behavior, not of sincerity, not of corruption. All these issues belong entirely to the realms of psychology, sociology, anthropology, political science, history, criminology, social philosophy, etcetera.
As you have certainly noticed,#1 I do not propose to change the Walrasian behavioral axioms but to completely REPLACE them by objective structural axioms. Economics is NOT a social science but a systems science.
And these are the three axioms of the correct macrofoundations approach: (A1) Yw=WL wage income Yw is equal to wage rate W times working hours L, (A2) O=RL output O is equal to productivity R times working hours L, (A3) C=PX consumption expenditure C is equal to price P times quantity bought/sold X.
That’s the absolute minimum for a start. This set is obviously superior to Walrasian and Keynesian axioms and leads to testable propositions. Empirical tests decide whether (A1) to (A3) are acceptable and NOT vacuous methodological filibuster.
References
Porter, T. M. (1994). Rigor and Practicality: Rival Ideals of Quantification in Nineteenth-Century Economics. In P. Mirowski (Ed.), Natural Images in Economic Thought, 128–170. Cambridge: Cambridge University Press.
#1 If not see the documentation on this Blogspot
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REPLY to Jamie Morgan on Jun 15You say: “What concerns me is that you consistently respond to all inquiry with assertion ...”. True, but I give you the reference to the comprehensive argument. What concerns me is that you consistently overlook that your questions and arguments have already been thoroughly answered.#1
You say: “the failure to agree is not itself a failure — since sometimes it reminds us of the limits of knowledge and the boundaries of ignorance — which is basic also to Socratic dialogue…”
Trivially true, we cannot know everything, but from this does not follow that we cannot know something. It is this limited but certain something that science and theoretical economics is all about.
Nobody needs a reminder that there are limits of knowledge and nobody needs the false modesty of ‘I know that I know nothing’. For a philosopher this is fine but for a scientist this is self-disqualifying.
In economics, we are FAR away from the limits of knowledge. In fact, the problem is the exact OPPOSITE: “we know little more now about ‘how the economy works,’ or about the modus operandi of the invisible hand than we knew in 1790, after Adam Smith completed the last revision of The Wealth of Nations.” (Clower, 1999, p. 401)
What we actually have are multiple approaches that are PROVABLE false. There are (at least) four heterodox profit theories and you can tell nobody that they are all true.#2 This lack of consistency has NOTHING to do with the limits of knowledge or the failure to agree but with incompetence and intellectual sloppiness and poor methodology and the persistent ignorance/violation of scientific standards.#3
Economics is a proto-scientific swamp: “We are lost in a swamp, the morass of our ignorance. ... We have to find the roots and get ourselves out! ... Braids or bootstraps are necessary for two purposes: to pull ourselves out of the swamp and, afterwards, to keep our bits and pieces together in an orderly fashion.” (Schmiechen, 2009, p. 11)
This is in simple words was axiomatization is all about. What concerns me is that you and Asad Zaman and many others on this blog do not grasp what the ancient Greeks grasped more than 2000 years ago.
As long as economists do not have a consistent definition of the pivotal concepts of profit and income it is absurd to philosophize about the limits of knowledge. Economists are over the ears in the swamp of ignorance and have NO idea of how to pull themselves out.
This is the concrete historical situation: Heterodoxy either REPLACES the vacuous Walrasian axioms HC1 to HC5 and comes forward with TESTABLE propositions about how the economy works or it goes down the scientific drain together with Orthodoxy.
References
Clower, R. W. (1999). Post-Keynes Monetary and Financial Theory. Journal of Post Keynesian Economics, 21(3): 399–414. URL
Schmiechen, M. (2009). Newton’s Principia and Related ‘Principles’ Revisited, volume 1. Norderstedt: Books on Demand, 2nd edition.
#1 For a test go occasionally to the AXEC Blogspot and enter for example Gödel or Duhem-Quine or Zaman in the search field.
#2 Heterodoxy, too, is scientific junk
#3 Prophets of Preemptive Vanitization
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REPLY to Asad ZamanYou say: “Even though Newton calls his four laws axioms, what he means by axioms is very different from what you mean by axioms.”
What I mean is the SAME what Newton meant. And this is the SAME what Popper meant:
“The attempt is made to collect all the assumptions, which are needed, but no more, to form the apex of the system. They are usually called the ‘axioms’ (or ‘postulates’, or ‘primitive propositions’; no claim of truth is implied in the term ‘axiom’ as here used). The axioms are chosen in such a way that all the other statements belonging to the theoretical system can be derived from the axioms by purely logical or mathematical transformations.” (1980, p. 71)
And this is the SAME what Einstein meant:
“But the axioms Science is the attempt to make the chaotic diversity of our sense-experience correspond to a logically uniform system of thought ...” (quoted in Clower, 1998, p. 409)
Newton, Popper, Einstein referred to the context of JUSTIFICATION. Peirce’s abduction refers to the context of DISCOVERY and it is the SAME as Popper’s Conjectures and Refutations:
“It is a great mistake to suppose that the mind of the active scientist is filled with propositions which, if not proved beyond all reasonable cavil, are at least extremely probable. On the contrary, he entertains hypotheses which are almost wildly incredible and treats them with respect for the time being. Why does he do this? Simply because any scientific proposition whatever is always liable to be refuted and dropped at short notice. A hypothesis is something which looks as if it might be true and were true, and which is capable of verification or refutation by comparison with facts. The best hypothesis, in the sense of the one most recommending itself to the inquirer, is the one which can be the most readily refuted if it is false. This far outweighs the trifling merit of being likely. For after all, what is a likely hypothesis? It is one which falls in with our preconceived ideas. But these may be wrong. Their errors are just what the scientific man is out gunning for more particularly. But if a hypothesis can quickly and easily be cleared away so as to go toward leaving the field free for the main struggle, this is an immense advantage.” (Peirce, 1931, 1.120)
You constantly CONFUSE the context of discovery with the context of justification. What Peirce said about the axiomatic-deductive method is the SAME what Aristotle, Newton, Einstein, Popper said and what I mean:
“Inference, which is the machinery of logic, is the process by which one belief determines another belief, habit or action. A successful inference is one that leads from true premises to true conclusions.” (quoted in Hoover, 1994, p. 300)
The clearly stated premises, a.k.a axioms/postulates/principles/primitive propositions, of Orthodoxy (HC1 to HC5 above) are provably false. What I mean with true macrofoundations I have clearly stated (A1 to A3 above). Now it is YOUR TURN to clearly state your economic axioms. Subsequently, the truth of the respective premises is indirectly established by testing the conclusions. This settles the matter.
As Peirce said: “That the settlement of opinion is the sole end of inquiry is a very important proposition.” (1992, p. 115)
References
Clower, R. W. (1998). New Microfoundations for the Theory of Economic Growth? In G. Eliasson, C. Green, and C. R. McCann (Eds.), Microfoundations of Economic Growth., pages 409–423. Ann Arbour: University of Michigan Press.
Hoover, K. D. (1994). Pragmatism, Pragmaticism and Economic Method. In R. E. Backhouse (Ed.), New Directions in Economic Methodology, 286–315. London, New York: Routledge.
Peirce, C. S. (1931). Collected Papers of Charles Sanders Peirce, Vol. I. Cambridge: Harvard University Press. URL
Peirce, C. S. (1992). The Fixation of Belief. In N. Houser, and C. Kloesel (Eds.), The Essential Peirce. Selected Philosophical Writings., Vol. 1, 109–123. Bloomington: Indiana University Press.
Popper, K. R. (1980). The Logic of Scientific Discovery. London, Melbourne, Sydney: Hutchison, 10th edition.
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REPLY to Jamie Morgan on Jun 17You say: “Perhaps there is a different way of thinking about these problems…”.
This exactly is the scientific problem: there are always many ways and opinions and questions and interests, and it can be a tedious task to figure out what is true and what is false.
“There are always many different opinions and conventions concerning any one problem or subject-matter ... This shows that they are not all true. For if they conflict, then at best only one of them can be true. Thus it appears that Parmenides ... was the first to distinguish clearly between truth or reality on the one hand, and convention or conventional opinion (hearsay, plausible myth) on the other ...” (Popper, 1994, pp. 39-40)
The difference between scientists and the rest is that scientists attempt to get a clear-cut either/or answer with the highest possible degree of certainty. Without this certainty, science cannot be cumulative. In other words, if one does not make sure that the elementary Law of the Lever or the Law of Falling Bodies is certain beyond a reasonable doubt one will never arrive at more complex relationships like the Law of Gravitation or the Schrödinger equation. Physicists are so high up the ladder because each rung from the first one onward is certain and stable and reliable and can carry a heavy weight. This is what logical and empirical consistency is all about.
Economics is not cumulative but circles since Adam Smith at a rather low level around the same issues. Take value or capital theory as an example or take Wicksell’s pertinent characterization.
“... when it is a matter of finding the cause of general changes in the price of commodities, and especially the influence on those of credit and the institutions regulating credit, some maintain that cheap and easy credit, in other words, a low rate of interest, will tend to increase the amount of means of payment in circulation and the demand for goods and this will tend to increase the general level of prices; while others maintain the contrary, that cheap credit means the same things as cheaper costs of production and so tends to lower the level of prices, not to raise it; and naturally ... there is no lack of more moderate opinion between the two extremes, eclectics who say that the influence of credit on prices is sometimes in one direction, sometimes in another and is sometimes nil.” (quoted in Deane, 1983, p. 8)
Such is the pseudo-scientists tautologically true answer. However, many are perfectly satisfied with this inconclusive sitcom stuff and euphemize it as Socratic. But, clearly, confused wish-wash is not that highly appreciated by genuine scientists.
Economics is still at the proto-scientific level because of scientific incompetence and because many simply prefer the swampy lowlands where “nothing is clear and everything is possible” (Keynes) over the hard rocks of true/false.
Those, who have ― for whatever reason ― established themselves in the swampy lowlands of plausible myths defend it with phrases like there is no truth, nobody knows anything, uncertainty is ontological, the effect is sometimes in one direction, sometimes in another, and sometimes nil, everybody has their own truths, quantum physics says whether the cat is dead or alive depends on the observer, knowledge is arrogance, ignorance is humility, truth is relative and culture-specific, Gödel has proved that logic has limits and ― the emotional solidarity of the incompetent ― we are ALL fallible humans. Yes, indeed, but we are NOT ALL imbeciles who accept utility maximization and equilibrium as a scientific explanation of how markets work or who maintain that a dozen false profit theories are better than one correct theory.
The fact of the matter is: scientists and swampies can never be friends.
References
Deane, P. (1983). The Scope and Method of Economic Science. Economic Journal, 93(369): 1–12. URL
Popper, K. R. (1994). The Myth of the Framework. In Defence of Science and Rationality. London, New York: Routledge.
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REPLY to Asad Zaman on Jun 17(i) You and I and everybody who uses the zero in a calculation care whether the calculation is correct and does NOT care whether the Arabs, Indians, Egyptians, or Greeks invented the zero. It is the same with fire-making or methodology. The actual use and the history of concepts or tools are different things. It is the very task of the economist to figure out how the economy works and NOT to clarify who invented what. The history of scientific thought is valuable in its own right but it is a DISTRACTION in the context of economics.
(ii) It is misleading and counterproductive to play the ‘experimental method of the Arabs’ against the ‘axiomatic-deductive method of the Greeks’. Science is defined by material AND formal consistency. It is the sophisticated COMBINATION of empirics and logic, or experiment and axiomatics, which delivers the winning formula of science. Incompetent scientists fall either on the side of crude observational empiricism or vacuous formalism.
(iii) Your account of the history of science is in almost every respect false or confused. Two examples suffice here, your characterization of Bacon#1 and your misplaced debunking of axiomatics: “Here is what the Greeks grasped more than 2000 years ago, based on an axiomatic-deductive approach to the natural sciences: 1. The Earth is the center of the universe.” It is common knowledge that: “Aristarchus of Samos was an ancient Greek astronomer and mathematician who presented the first known model that placed the Sun at the center of the known universe with the Earth revolving around it.” (Wikipedia)
(iv) I wonder whether anybody checks the content of the WEA Pedagogy Blog. Just for the records: I do NOT accept this easy to disprove garbage as Heterodoxy economics or methodology. The Pedagogy Block has to be clearly labeled as Asad Zaman’s idiosyncratic contribution which does NOT represent any official consensus of the WEA. The Pedagogy Blog is sufficient to expel RWER-Heterodoxy from the sciences.
(v) You say: “My critique of axiomatics is based on axiomatics as defined by Lionel Robbins, who is the founder of current economic methodology. ‘The propositions of economic theory, like all scientific theory, are obviously deductions from a series of postulates. And the chief of these postulates are all assumptions involving in some way simple and indisputable facts of experience….’ With this methodology, axioms are certain, and logical deductions are certain so there is no room for conflict with experience. This is exactly the same as axiomatic Greek geometry, which can never be wrong, because it is based on certainties and driven by logic.”
This is as confused as it can get. First of all, Robbins explicitly claims that his postulates are based on “simple and indisputable facts of experience”. This is what you praise as the superior method of the Arabs. Robbins is the very prophet of what Popper called observationism: “These are not postulates the existence of whose counterpart in reality admits of extensive dispute once their nature is fully realized. We do not need controlled experiments to establish their validity: they are so much the stuff of our everyday experience that they only have to be stated to be recognized as obvious.” (Robbins, 1935, p. 79)
(vi) Robbins’ methodological blunder was that he based economics on BEHAVIORAL axioms (e.g. constrained optimization). Yet, there is NO such thing as a ‘certain, true, and primary’ (Aristotle) behavioral axiom.
To make a long argument short: Robbins’ definition of economics has to be changed from: “Economics is the science which studies human behavior as a relationship between ends and scarce means which have alternative uses.” (Robbins, 1935, p. 16) to “Economics is the science which studies how the economic system works.” (2013, p. 20)
Objective structural axioms lead to relationships that are readily testable, e.g. the Profit Law or the Employment Law.#2
(vii) The lethal error/mistake of Orthodoxy does NOT consist in the application of the axiomatic-deductive method but in taking green cheese behavioral assumptions as axioms. From this follows that economics has to move from behavioral microfoundations to structural macrofoundations.
(viii) Science is about true/false and NOTHING else. We agree that Robbins based economics upon provably false axioms.
References
Kakarot-Handtke, E. (2013). Crisis and Methodology: Some Heterodox Misunderstandings. SSRN Working Paper Series, 2083519: 1–25. URL
Robbins, L. (1935). An Essay on the Nature and Significance of Economic Science. London, Bombay, etc.: Macmillan, 2nd edition.
#1 Go occasionally to the AXEC Blogspot and enter Bacon in the search field
#2 Unemployment ― the fatal consequence of economists’ scientific incompetence